Gift and Souvenir Stores
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 13,700 gift and souvenir retailers in the US sell gifts, novelties, souvenirs, and related merchandise. Major product categories include souvenirs, novelty items, kitchenware and home furnishings, clothing and jewelry, seasonal decorations, greeting cards, and toys. Companies may specialize in a particular category, such as Christmas merchandise, Halloween costumes, or party supplies. The industry includes national and regional chains, franchises, and independent operators.
Seasonal Sales
Gift giving is seasonal, and peaks during gift-related holidays, such as Christmas, Valentine’s Day, and Mother’s Day.
Vulnerable To Economic Conditions
Gifts, souvenirs, and novelty items are discretionary purchases, and demand typically drops during economic downturns.
Industry size & Structure
The average gift and souvenir store operates out of a single location, employs about nine workers, and generates about $1.4 million annually.
- The gift and souvenir retail industry consists of about 13,700 companies that employ about 136,300 workers and generate about $19 billion annually.
- The industry includes national and regional chains, franchises, and independent operators.
- The industry is fragmented; the top 50 firms account for 47% of industry sales.
- Large companies include Party City Holdings (which has filed for Chapter 11 bankruptcy protection), Harry & David (a subsidiary of 1-800-FLOWERS.COM), and Spencer Gifts (which also owns Spirit Halloween). Most Hallmark stores are independently owned.
Industry Forecast
Gift and Souvenir Stores Industry Growth
Recent Developments
Jan 11, 2025 - Party City Closing Stores After Bankruptcy Filing
- Party City has announced it filed for Chapter 11 bankruptcy protection in December 2024 and plans to close all of its nearly 700 locations, according to a report in Retail Dive. The company had previously filed for bankruptcy in January 2023 and emerged from bankruptcy later that year after shedding nearly $1 billion in debt. However, the company said in court documents that it emerged from bankruptcy into a challenging environment due to pressures from inflation, a reduction in discretionary spending, changing consumer preferences, and shrinking margins. Party City faced increased competition thanks to the growth of party products at Target and Amazon and the expansion of specialty stores like Spirit Halloween. Party City joined other high profile bankruptcies in 2024 including Spirit Airlines, Joann, and Tupperware. Corporate bankruptcies have reached their highest levels since 2010, with 686 companies filing for bankruptcy in 2024, per data from S&P Global Market Intelligence.
- Retailers are facing a nearly 30% increase in the rate of returns compared to last year, which could cut overall profit margins on the industry’s $1.2 trillion in global sales, according to Salesforce data reported in PYMNTS. Shoppers have already returned $122 billion in merchandise, per the report. According to Salesforce’s Consumer Insights Director Caila Schwartz, “Retailers had a robust holiday season, but a 28% rise in the rate of returns compared to last year is a cause for some concern.” AI tools are expected to be important in minimizing revenue losses on returns and reengaging with shoppers, per Schwartz. Returns volumes have increased in part due to the growth in online shopping and shopper practices such as “bracketing,” involving ordering multiple sizes or variations with the intention to return unwanted items, according to Hannah Bravo, head of Loop Returns. She said retailers are taking different approaches to managing returns such as offering longer return windows, charging fees related to item returns, and letting customers keep low-value items instead of returning them.
- According to a report in Gifts and Decorative Accessories magazine, the estimated impact by president-elect Donald Trump’s tariff proposals could cost American consumers between $46 billion and $78 billion in spending power. A new study by the National Retail Federation (NRF) examined the impact of Trump’s proposed universal 10-20% tariff on imports from all countries and an additional tax on imports from China. The study showed the tariffs would have a “significant and detrimental impact” on the costs of a wide range of consumer products, in particular those products supplied primarily by China. US retailers would be unable to absorb the increased costs and would need to raise prices “higher than many consumers would be willing or able to pay.” According to Jonathan Gold, NRF vice president of supply chain and customs policy, “Retailers rely heavily on imported products and manufacturing components so that they can offer their customers a variety of products at affordable prices. A tariff is a tax paid by the U.S. importer, not a foreign country or the exporter. This tax ultimately comes out of consumers’ pockets through higher prices.”
- Halloween retailers are counting on higher revenues in 2024 when the holiday falls on a Thursday compared to a year ago when it fell on a Tuesday, according to Licensing International. Many consumers prefer to buy their Halloween products in the six to eight weeks leading up to the annual fall holiday. Spirit Halloween, owned by Spencer Gifts, opened its flagship store in New Jersey in August, with the rest of its locations opening by September. While warehouse stores like Costco began stocking Halloween products in late July, mass retailers like Target and Walmart will stock Halloween products in mid-September. According to the report, many retailers ordered 10-15% fewer Halloween SKUs in 2024, narrowing their focus amid a challenging consumer environment and focusing on classic horror-themed costumes. In addition to traditional horror fare, Halloween retailers are trying out costumes and accessories from YouTube, video games, anime, streaming, and social media brands. Examples include Spirit Halloween launching costumes from the YouTube series "The Amazing Digital Circus," and Jazwares' licensed costumes from Uplift Games' Roblox's title "Adopt Me." Retailers are also offering more Halloween inflatables and animatronic figures for lawn décor.
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